What Google/Moto means for Android OEMs

SAN JOSE, Calif. – Google's bid for Motorola may save the Android ecosystem from legal threats, but it also will raise new tensions among smartphone, tablet and TV makers. The Internet search giant also must figure out how to manage handset and set-top businesses at arm's length.

Google is saying all the right things: It will make no changes in how it manages access to Android, and it vows to run Motorola as a separate company. But with both efforts, the devil is in the details.

In a conference call announcing the acquisition plan, Google's top Android executive gave a look into his group's evolving development process.

"We select around Christmas time each year a manufacturer to work closely with to release a device [and] that includes [their] semiconductor and key component [suppliers]," said Andy Rubin, Google's senior vice president ofmobile. "Teams huddle together in one building for nine to 12 months and at or right before the next holiday season, the device pops out," he said.

"We don’t expect that to change at all [after the Motorola acquisition]," Rubin said. All Android partners "will be part of that bidding process" presumably to be chosen for a collaboration effort "and that lead development process and Android remains open to other partners," he added.

But when the company used that process to carefully stage access to its Honeycomb version of Android for tablets, Google left many OEMs feeling left in the lurch.

Google worked with Motorola and key chip suppliers on its Xoom, the first Honeycomb tablet. It then worked with a handful of other top tier OEMs for tablets that followed a few months later. Other OEMs are still waiting for the release of Ice Cream Sandwich, the first open source release of Android that will include the Honeycomb code.

In addition, mobile systems makers in Taiwan who make as much as 90 percent of the world's notebook PCs, said Google provides virtually no local support for their efforts. By contrast, Microsoft has a long tradition of working closely with Taiwanese companies such as Compal, Foxconn, Inventec and Quanta.

Google provided quotes from top execs at HTC, LG Electronics, Samsung and Sony-Ericsson saying they support the Motorola deal as a way to protect the Android ecosystem. However, it appeared from the Google conference call that those companies were only very recently briefed on the plan.

"I spoke yesterday to I think it was the top five Android licensees and they all showed enthusiastic support for the deal," said Rubin.

"Although they provided canned quote from key partners, I am sure that hardware OEMs will be very nervous now about whether Google is playing the Android field evenly," said an executive at one Taiwan notebook maker who asked not to be named.

Google will not want to favor any one system maker. In a Google I/O press conference earlier this year, Rubin was clearly at pains to show he wants to give every major player a chance to be involved in lead projects. But the Motorola deal will increase the complexity of being even handed—and being perceived as fair.

At the end of the day, this was a challenge Google didn't need. It is hard enough herding all the Android cats without owning one of them.

Google have never expected or demanded exclusivity that I am aware of. If you have examples, then please supply them.
HTC manufactures Android phones and WinPhone phones. No problems.
Google allows people to buy advertising from Bing. No problems.
Youtube (Owned by google) will take you to itunes to buy songs. No problem.
Google has experimented in many areas. Some have worked and some have not. What is great is that they are trying alternatives and are prepared to take risks.

Google is very good at thinking outside of the box. They do come up with some ideas that don't pan out, but at least they are willing to take chances that other companies will never consider. I hope some of that rubs off on Mot. Maybe they will get back some of what they lost.

Maybe I overstated it a bit--I shouldn't say 'typical Google disaster', but more 'typical of Google's occasional misfires'.
And they are quick to realize when they have a miss and move on.
But with Buzz they were thinking more of themselves than their customers. I'm hoping that with Motorola they don't think more of themselves than their partners, or it will be a lot worse than a misfire.

@tb1 I would not call Google arrogant. Maybe I am being charitable but I think they are not afraid to try new things (like Wave) then toss them if they don't catch on. The down side is it hurts their credibility when they come out with te next next big thing.

Another thought:
Google's biggest fault is its arrogance. Remember Buzz? Checkout? (which still exists, though it pales in comparison with Paypal--mainly because Google insists on exclusivity with vendors, which makes them laugh).
If their arrogance takes over, they may not sell off the Motorola phone business, which would be a typical Google disaster.,

Apple is suing Samsung and HTC for their Android products. If they are successful, they could halt Android in its tracks.
Motorola has a large number of basic cell phone patents. It is presently suing Apple and Microsoft over them. This buyout gives Google the leverage it needs to stop Apple's lawsuits.
Motorola also has a number of MPEG patents, which Google could use in its battle with the MPEG consortium.
The smartest thing they could do is spin off the cell phone division (minus the patents) as quickly as possible.

I think you hit the nail on the head with this one. Convergence of handset/tv hardware has already started and can only get bigger. TV as we traditionally know it is dying and the void is being filled by online content. Mobile TV appears to be the next big thing. I'm sure the next Moto/Google phone will head in this direction

I think that the other Android licensees are going to end up winning from this deal. I see Google quietly killing Moto's manufacturing capability for handsets and moving it more to Qualcomm's model of being an IP house. Google gets their IP portfolio out of the deal and the capability to do reference designs for hardware platforms and prunes back the Android ecosystem in the process. They are certainly not going to move to Apple's vertical structure where they try to do it all and hog the market.
Larry M.

Well, I think Samsung's patent problems with Apple just went away because of the Google purchase. I'd say that Samsung would be happy about that. Motorola was just getting to be lean and mean and now that just got transfused with a bunch of cash. Is that likeley to help or hurt? I dunno. For the Motorola stock owners, their lives will improve in the short term, no doubt!